A Lucky Break: Why April’s Usual Stock Market Surge Won’t Happen This Year
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The Stock Market Historically Loves April, But This Year’s Uncertainty is Uncertain
The stock market historically loves April. But the month’s track record of strong performances is uncertain this year after President Donald Trump’s back-and-forth tariff announcements have sent U.S. stocks into a frenzy.
Why April is Historically a Strong Month for Stocks
Historical data shows that April tends to be a top-performing month for the stock market, rewarding investors with an average return of 1.6% since 1945. As for why, the reasons remain hotly debated.
A Modest Track Record
Since 1971, April has been the second-best month of the year for the S&P 500. However, this year the month began with the index dropping 11.54% alongside a record two-day loss that wiped out $6.6 trillion in investor value. Then on Wednesday afternoon, the market rebounded when Trump reversed course and announced a 90-day tariff pause.
What to Expect?
With uncertainty continuing to be a theme this year, how will April play out, and what does it mean for your portfolio?
Historical Data Only Goes So Far
Historical data only serves as a reference point, not a crystal ball. In fact, most economists do not take market predictions seriously. This year, we can already see why. Uncertainty around Trump’s widening trade war has soured market outlooks.
A Bearish Environment
“Right now, we’re in the unique position where all three of our risk measures for the S&P 500 are bearish,” says Jordan Rizzuto, managing partner and chief investment officer of GammaRoad Capital Partners. “It is categorically the least favorable environment you can have for equity market risk.”
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